Optimal and Elastic Energy Trading for Green Microgrids: a two-Layer Game Approach

Energy trading mechanism for microgrids has an inherent two-layer architecture, in which the energy trading at the first layer is between a microgrid aggregator and consumers (e.g., households) within a microgrid, and the second layer is referred to as the wide area energy trading among multiple microgrids. This paper employs a two-layer game approach to achieve optimal and elastic energy trading for microgrids and improve utilization of green energy. First, a non-cooperative game is developed inside a microgrid, in which the relationship among household users is non-cooperative, and they adjust load schedules to optimize their utilities while trading energy with the microgrid aggregator. Second, a multileader-multifollower Stackelberg game is employed for the energy trading among microgrids. The role of a microgrid (as an energy buyer or seller) in the energy market is based on the result of the first game, and it can elastically adjust its energy trading strategy by charging or discharging the energy storage device. The existence and uniqueness of the equilibriums for the two games are proven. We also present algorithms that can reach the equilibriums where players achieve optimal utilities. Simulation results show that the proposed two-layer energy trading is able to significantly improve the utilization of microgrids' green energy.